October 15, 2021
financial recovery

IDC financial support packages for companies affected by looting

The Industrial Development Corporation (IDC) has earmarked a R1.5 billion funding package in response to the civil unrest, looting and destruction of property that occurred in parts of the country, according to the company’s website. The IDC’s R1.5 billion Post Unrest Business Recovery package includes funding support for businesses and communities impacted by the unrest. This package is a part of the R3.75 billion comprehensive economic recovery package recently announced by the Minister of Trade, Industry and Competition, Mr Ebrahim Patel. “We began monitoring the negative impact soon after the civil unrest flared up. Our exposure to key sectors of the economy and feedback from our affected client base spread […]
July 9, 2021

The end to Bank Codes in South Africa

The rumours of bank codes becoming non-existent has settled into a reality. This has been an ongoing discussion amongst banks within South Africa over the last few years. The first two banks to implement the extinction of bank codes were Investec and Citi Bank as they publicly notified businesses of their decision in October 2019. Shortly after this came into effect, Standard bank had announced that they too were going to end the supply of bank codes from the 1st November 2019. This was a concerning component for businesses as it would impact the way in which credit assessment decisions would be made when trading with new and existing customers. […]
April 20, 2021

Sureties vs Guarantees

A number of Debtsource clients have over the past months queried with us what the difference is between a surety and guarantee. In some cases clients prefer to have a surety, while other clients are advised by their legal representatives to rather call for an unconditional guarantee. Credit Guarantee Insurance Corporation (CGIC) recently circulated a memo on the differences between the two forms of security, and for those interested in the technical aspects of B2B credit securities, the document provides good guidance on which document should be used when.   Suretyships A suretyship is an accessory contract to another contract in terms of which a surety binds himself as a […]
April 8, 2021
domino effect

The domino effect of insolvencies: is your company ‘vaccinated’ against it?

The following article is replicated with the kind permission of Euler Hermes South Africa Doing business with large companies can bring major benefits to a supplier: they are generally financially more stable, and can provide steady volumes of orders. However, it is still not a risk-free endeavor. Although the likelihood of failure is lower compared to SMEs, an insolvency of a large client can be devastating to suppliers, putting their very survival at risk. And worse – much like Covid-19 – large corporate failures create a domino effect, with waves of insolvencies in their ecosystems’ supply chains due to factors ranging from lack of supply or demand, to cash flow issues and […]